The average product of labor at point C in(a)is given by the slope of the line OC.To the left of point E in (b)the marginal product is above the average product and the average is increasing;to the right of E the marginal product is below the average product and the average is decreasing. As a result,E represents the point at which the average and marginal products are equal,when the average product reaches its maximum
The average product of labor at point C in (a) is given by the slope of the line OC. To the left of point E in (b) the marginal product is above the average product and the average is increasing; to the right of E the marginal product is below the average product and the average is decreasing. As a result, E represents the point at which the average and marginal products are equal, when the average product reaches its maximum
Production with one variable input,labor,can be usefully described in terms of the average product of labor (which measures output per unit of labor input),and the marginal product of labor(which measures the additional output as labor is increased by 1 unit)
❑ Production with one variable input, labor, can be usefully described in terms of the average product of labor (which measures output per unit of labor input), and the marginal product of labor(which measures the additional output as labor is increased by 1 unit)
According to the law of diminishing marginal returns,when one or more inputs are fixed,a variable input (usually labor)is likely to have a marginal product that eventually diminishes as the level of input increases. The shape of each isoquant can be described by the marginal rate of technical substitution at each point on the isoquant
❑ According to the law of diminishing marginal returns, when one or more inputs are fixed, a variable input (usually labor) is likely to have a marginal product that eventually diminishes as the level of input increases. ❑ The shape of each isoquant can be described by the marginal rate of technical substitution at each point on the isoquant
Output per Time Period C 。.0 00 100 B 905”0D8e有50t00g00, ■■ : 50 "5s4 0 6 8 Labor per Time Period The Effect of Technological Improvement
6 7 8 50 100 Labor per Time Period Output per Time Period C B A 0 The Effect of Technological Improvement O1 O2 O3